Recently, I spoke with Sam Wade, Chief of the Transportation Fuel Branch of the California Air Resources Board (CARB) about the status and outlook for the Low Carbon Fuels Standard (LCFS) program. A couple of highlights from the interview follow below, and in addition, we talked about the continuing decline of corn ethanol carbon intensity (CI) and the future of advanced biofuels. You can listen to or download the podcast below or listen to it in ITunes.
“Let me start with some of the success that we have seen because I think that helps frame where we see things going. From 2011 to 2016 we have seen really strong growth in liquid diesel substitutes especially in renewable diesel and biodiesel with renewable diesel growing from 2 million gallons in 2011 to over 200 million in 2016 and biodiesel growing from about 13 million to over 100 million. And so that has been very significant. We have also seen renewable natural gas really making some strong inroads in the CNG and the LNG space where renewable natural gas now makes up over half of all of the gaseous fuels used in California vehicles.
We have also seen significant growth in the number of electric vehicles on the road and even more of that is coming along with vehicle manufacturers set up to offer over 80 electric and hydrogen vehicles in the next 5 model years. We have seen moderate but important growth in the use of E85 and ethanol and flex fuel vehicles and really across all of those fuels we have seen continued decline in the carbon intensity of each of those fuels. So we are pretty excited about the progress that we’ve made using the Low Carbon Fuel Standard so far.”
“In the scoping plan process that you mentioned we will be recommending to our board that we build on the success of the [LCFS] program and we use the framework that we have in place to further decarbonize the fuel mix out of 2030. The plan would require a decline of 18 percent in carbon intensity below 2010 levels. That is an additional significant push that we need to make but as to what fuels might help us get there we have run a wide variety of scenarios as part of this scoping plan analysis. Most of those scenarios involve one of the following two things or a combination. First, we think there is still more opportunity for continued incremental improvement from the first generation of fuels that provides the majority of credits so far. If we see continued volume growth and carbon intensity decline across biodiesel and ethanol and, to some extent, renewable diesel, we would be very excited about that.
On top of that we also do expect to see some penetration of second generation biofuels or fuels like electricity and hydrogen that have a much bigger greenhouse gas benefit per unit of fuel sold. But on top of that, one of the nice things about the LCFS we don’t have to have a perfect crystal ball because the program doesn’t pick winners. It basically sets up this system of tradable credits and provides value to the lowest carbon fuels that can come to market. So the framework really does facilitate us to look across a wide variety of options and to hopefully drive the best option to market.”
“We are going to be starting a rule making which is sort of our formal process to change the program. And that will really commence after the scoping plan process concludes. We have a little bit of preliminary workshops and engagement with stakeholders on a few items. The most significant really being the addition of a mandatory third party verification system for checking the carbon intensity crediting on the program. And hopefully what that will look like is something very similar to what you see under the California mandatory reporting program under the cap-and-trade system here or some of the schemes in the European biofuel systems.
What that involves is third parties becoming an additional check on the information in the program and supplementing the work of ARB staff to make sure that we get all the numbers right and the very high value of these LCFS credits is backed by the most credible data that we can impose. On top of that, another big priority that we have is the addition of alternative jet fuels and the reason that we are so focused on alternative jet fuels is that we see the airlines emerging as important long-term purchasers that help get new advanced biofuel facilities constructed by providing long term off tank agreements for those fuels. So we want to recognize that and encourage that.”
Tammy Klein is a consultant and strategic advisor providing market and policy intelligence and analysis on transportation fuels to the auto and oil industries, governments, and NGOs. She writes and advises on petroleum fuels, biofuels, alternative fuels, automotive fuels, and fuels policy.